Philippine Airlines has filed for bankruptcy protection in the United States to undergo financial restructuring in the Chapter 11 reorganization process - according to American bankruptcy laws. Normally, the company proposes a reorganization plan in order to maintain its activity and to pay the creditors on time.
"Chapter 11 allows us to restructure contracts that are largely governed by foreign law, with our largest creditors based outside the Philippines. We are thus able to ensure the execution of all these agreements within a well-established legal process, which is universally accepted and which can be completed quickly. ", said Nilo Thaddeus Rodriguez, Senior VP and Chief Financial Officer of Philippine Airlines. "Our highest priority is the safety and health of the passengers, employees and communities we serve. Nothing about this will change as we undergo restructuring. ”
In the first 6 months of 2021, Philippine Airlines recorded a net loss of 16.6 billion pesos (over $ 330 million). In 2020, the airline reported a net loss of 20 billion pesos ($ 399 million). In the Philippines, travel volume has dropped by about 75%, from 30 million passengers in 2019 to just 7 million passengers in 2020, due to travel restrictions imposed by the coronavirus pandemic.